Find anything about our articles and more.
Enter a query in the search input above, and results will be displayed as you type.
Try typing "Dubai Economics", "Dubai GDP", "GCC Macro"
Daniel Marc Richards - MENA Economist
Published Date: 31 March 2020
The steering committee of Expo 2020 is recommending that the event, due to start in October this year, be postponed to next year. The final decision will be made by the BIE in Paris, but the Expo organisers said that participants had been affected by the disruptions caused by the coronavirus and had ‘expressed a need’ for the event to be postponed by a year.
There was some positive news from China, as the manufacturing PMI survey exceeded expectations by returning to positive 50-plus territory in March at 52.0. This compares to the record low of 35.7 we saw in the midst of China’s crisis in February. Services and construction also posted a positive reading at 52.3. While this doesn't meant that output is back to normal, it is an improvement on February’s nadir, and should be encouraging to those countries some weeks behind China in their own battle with the disease. That being said, there remains a tail risk from the virus to China in that many of its key export partners are now affected by it, and this was in evidence in the new export orders sub index remaining in contractionary sub-50 territory at 46.4.
Australia yesterday announced plans for a record stimulus package to the value of AUD 130bn, or around USD 80bn. That takes the total stimulus to date to a whopping AUD 320bn, equivalent to around 16.4% of GDP, with wage subsidies of AUD1,500 every fortnight for those in need amongst the measures announced. The country is at risk of its first recession since 1991 as the pandemic weighs on activity.
Source: Emirates NBD Research
Treasuries traded mixed as investors remained optimistic over near-term efforts to contain the spread of coronavirus. The curve steepened with yields on the 2y UST and 10y UST ending the day at 0.22% (-2bps) and 0.72% (+5bps) respectively.
Regional bonds closed lower as investors pared positions at the start of new week. The YTW on Bloomberg Barclays GCC Credit and High Yield index rose +12bps to 4.76% and credit spreads widened 16bps to 412bps.
Oman has asked state-owned companies to reduce their operational and administrative expenses in 2020 by 10% and also stop any new projects or capital spending for this year. This follows a rating downgrade by rating agencies late last week.
S&P downgraded the rating of GFH financial group to B- from B with stable outlook.
The dollar retained a firmer bias after weakening last week, with weak oil prices and increasing coronavirus cases returning a safe-haven bid to it, and month-end and quarter-end activity was also supportive. The DXY steadily regained some of its losses to close in on Friday's opening price of 99.352, currently just under that figure at 99.315.
USDJPY experienced renewed volatility, and it continues to make gains in the early hours of this morning, having broken through the 108 level to trade at 108.45. The EUR dropped over 1% to reach 1.1020, and GBP experienced a similar negative downtrend, operating well below its closing price at 1.2337. The AUD also saw some volatile movement, even with the announcement that Prime Minister Scott Morrison has pledged an AUD 130bn support package. The currency traded with a bearish tone, operating predominately below the closing price of 0.6168 but has since regained some of those losses in the early hours of today, sitting at the 0.6176 mark.
Developed market equities closed higher as investors exuded confidence in governmental efforts to curb the spread of the viral outbreak. The S&P 500 index and the Euro Stoxx 600 index added +3.4% and +1.3% respectively.
Regional markets closed sharply lower as low oil prices and concerns over the halt in economic activity weighed on investor sentiment. The DFM index and the Qatar Exchange lost -2.3% and -1.8% respectively.
Emaar Properties reported earnings of USD 1.68bn, flat compared to last year. The group also informed that all three of its list companies – Emaar Properties, Emaar Malls and Emaar Development will not pay dividend for 2019 in view of the current circumstances. The companies did not provide further details.
Oil markets endured another rough start to a trading week with Brent closing 8.7% lower at USD 22.76/ while WTI closed at just over USD 20/b, down 6.6%. At one point during trading WTI prices did move below USD 20/b. Both benchmarks are moving higher today, spurred on by news that US President Donald Trump and his Russian counterpart Vladimir Putin discussed how to stabilize oil markets. A bounce in China’s PMI data will also be helping prices even as the rest of world’s economies remain in effect on hiatus.
Markets shrug off US-China tensions for now
Low inflation stalks the global economy
Jobless claims jump in the UK
Markets jump on hope of a vaccine